Memo from European Commission regarding Net Neutrality and the regulatory proposal for a Connected Continent.

Brussels, 27 February 2014 1 in 4 European internet users still experience blocking of internet content, study shows. 24% of European internet users say they are prevented by their providers from watching videos, listening music or using other applications of their choice, according to a new Eurobarometer survey of 28,000 citizens across the EU. Blocking still a common practice The survey found that: 41% experience problems watching a video on a mobile device and 37% on the fixed Internet connection at home (due to speed limitations or blocking of content) 23% experience problems listening to music on their mobile device, 23% experience problems uploading content on Facebook, blogs or forums through their mobile device 19% experience problems playing online games at desk computer, 9% experience problems using Internet-delivered phone calls  Insufficient information on speed The also survey shows that 60% of customers do not know their Internet speed.  Of those who know their speed, 26% say that they do not get a speed which matches the terms of their contract. 40% of all respondents have experienced an internet connection break down. European Commission Vice President Neelie Kroes said: “When you buy an internet subscription you should get access to all content, and you should get it at the speed you have paid for. That is what the open internet should be, and all Europeans should have access to it.” The findings of the study reinforce evidence reported by the Body of European Regulators for Electronic Communications in 2012 on net neutrality and open internet. “My goal is to protect consumers by guaranteeing an open internet across Europe and by giving them new rights and transparency regarding their internet connection. My goal is also to protect innovation, so that anyone can innovate on the open internet and alongside the internet without harming it. This would ultimately promote more competition and choice for the benefit of consumers” Neelie Kroes said Internet services for all The Commission's proposed Connected Continent Regulation (MEMO/13/779) aims at a single market for Internet and communications. The Proposal is currently being discussed by the European Union's legislators (European Parliament and Council). This proposal would deliver an open internet for all citizens in Europe and enhance transparency by requiring operators to provide their customers with accurate information about the speed and quality of the internet service they provide. It would end discriminatory blocking and throttling and deliver effective protection of the open internet. It sets out clear rules regarding traffic management banning such management except in exceptional circumstances. It also enables the provision of “specialised services” such as high definition video services and eHealth services which promote innovation and choice in telecoms markets, but it enables them in a way which maintains the quality of general internet access. Using this approach, operators would continue to be able to compete for consumers on price and quality differences (for example, different internet speeds or data volumes) that best match customers' needs. 11. Yes to Net Neutrality! A Connected Continent means an open internet PROBLEMS There are no clear rules on net neutrality today at EU level, leaving 96% of Europeans without legal protection for their right to access the full open internet. National regulators do not have the power to intervene against blocking and throttling under current EU rules. Some EU Member States (NL, SI) have adopted laws, other countries are reflecting on measures, but without EU action this could further fragment the European market, and significantly complicate the integrated management of multi-territorial networks. The blocking and throttling of P2P and VoIP is the most common example of unacceptable traffic management by operators: around 21% of fixed Internet access subscribers and around 36% of mobile subscriptions are affected by restrictions. This causes problems for: consumers who can’t enjoy full internet; content and application providers who do not have a guaranteed access to consumers, and are prevented from innovating in the long term; operators who face different approaches regarding traffic management practices in different Member States and who are not encouraged to create new business models, but simply protect past/current territory and traditional revenue sources like voice calls. SOLUTIONS OFFERED This proposal will end discriminatory blocking and throttling and deliver effective protection of the open internet. It sets out clear rules for traffic management on the Internet, which has to be non-discriminatory, proportionate and transparent. Companies would however be allowed to differentiate their offers (for example by speed) and compete on enhanced quality of service. There is nothing unusual about this – postal services (express mail) and airlines (economy/business class) have done this for decades. But this is subject to a vital pre-condition: that the quality of open Internet must not be impaired. To meet end-users' demand for better service quality, content providers may agree deals with internet providers to assure a certain quality of service ("specialised services"). Such offers will enable telecom operators to generate additional revenue streams from OTT actors, content providers as well as from consumers, who are willing to pay for better or faster services. These revenues, in turn, will enable operators to finance investments into network upgrades and expansion. Specialised services must not lead to quality degradation of the "normal" Internet. National regulators will monitor quality of service and may impose minimum quality requirements, under Commission coordination. IMPACTS For business: Stepping stone for innovators, who will not see their applications and services blocked and who will be able to choose to pay for a guaranteed quality of service (ex: videoconference businesses, cloud computing, e-health). European operators can develop new business models on a pan-European scale. For consumers: Will be given new rights that they do not have today. Will be able to access all contents and applications of their choice on any device they choose (within the limits of any contracted data volumes or speeds and subject to existing laws) They will also benefit from a greater range of high-quality services on offer. They will have access to an open internet, vital for freedom of expression and debates, as well as the entry point for innovative online start-ups. For the future: A real basis for providing and enjoying services everywhere in the EU. It will allow innovative companies to launch services without fear of blocking or throttling and design new services requiring a guaranteed quality of service. Operators will have access to additional revenue streams to finance investments into network upgrades and expansion. Vice President Neelie Kroes said: "We do not have protection of net neutrality in Europe today. This proposal will ensure it. The proposal will optimise the outcome for end-users, content providers and Internet service providers. 12. New consumer rights A Connected Continent means new rights for consumers: #1 Quality of Service PROBLEMS Today operators are often not sufficiently transparent on their traffic management practices as well as on the quality of service actually provided. 94% of consumers think that ISPs do not provide clear information on their website on blocking/throttling of specific applications or services. There are major discrepancies between advertised speeds and actual speeds on fixed networks. On average, EU consumers receive only 74% of the advertised headline speed they have paid for. SOLUTIONS OFFERED Operators required to supply (both public and contractual) information on the average speeds they actually provide to their customers during normal and peak times, data volume limitations, and on traffic management practices. National regulators required to monitor quality of service and may impose minimum quality requirements, under Commission control. Consumers can terminate their contract or claim damages if there is a significant and non-temporary discrepancy between what they were promised and the service they actually get (e.g.: speed). IMPACTS For business: Increased chances for price and quality competition as consumers are more aware of services received and can more easily change providers if they are unsatisfied or seek a different type of service. For consumers: Will be protected against misleading offers and will have a real understanding of the service they are entitled to expect and the right to leave if they are not happy with it. For the future: Better informed consumers can properly choose the service provider and offers that suit them best and obtain the services they paid for. Vice President Neelie Kroes said: "These measures will achieve real transparency and enable consumers to give informed consent. You need to know what you are getting, and not getting, before you sign and pay. These EU-wide requirements are necessary to make European single consumer space work.” A Connected Continent means new rights for consumers: #2 better contracts and more transparency PROBLEMS Today contracts are hard to understand, do not include critical information for the consumer, and are difficult to enforce or leave. Consumers are frequently locked in to internet and phone contracts. Barriers to switching include length of switching time, loss of the email address, high termination fees and long notice periods. Almost half (44%) of the respondents experienced problems of some kinds when switching (study "The Functioning of the Market for Internet Access and Provision from a Consumer Perspective"). SOLUTIONS OFFERED Extra information to be included in contracts including: data volume limitations, the actual data speeds, how to monitor consumption and an explanation of the practical impact of the service characteristics on the use of content, applications and services; Contract periods: There can be no initial commitment exceeding 24 months, and a 12 month-only option must be provided Contract roll-over: warning provided at least one month in advance, with an option to oppose tacit extension of the contract; in case where a contract rolls over the contract can be terminated without any costs with a 1 month notice. Contract termination: consumer to gain right to terminate any contract after 6 months without penalty with a one-month notice period; reimbursement due only for residual value of subsidised equipment/promotions, if any. Any restriction on the use of the terminal equipment on other networks must be lifted free of charge once any due compensation of subsidies and/or promotion is paid. Switching: Explicit right to port within the shortest possible time. Direct charges to end-users, if any, should not act as a disincentive to change provider; Explicit prohibition of switching users to another provider against their will; Automatic cancellation of old contracts with losing providers after the switch without end-users having to contact their losing provider; Right of pre-paid subscribers to obtain a refund of any remaining credit when switching; Provision of email forwarding for customers from old ISP to new one (where this ISP previously provided an email address); Non-allocation of the initial email address to another end-user at least before a period of two years. TRANSPARENCY: Provision of information on volumes, tariffs and quality of service provided, actual performance of service; Mandatory availability of comparison tools provided by national regulator or accredited third parties to allow users to know the actual performance of electronic communication network access and services and the cost of alternative usage patterns; End-user compensation for abuse or delays of switching: Extension of transparency safeguards of the roaming regulation (alert mechanism, cut-off limit) to domestic communications bill-shock mechanism to avoid "bad surprises". IMPACTS For business: Increased chances for competition as consumers are more aware of services received and can change operators more easily. This leads to new opportunities for provides with attractive offers which meet consumer demands.. For consumers: Can hold service providers to account over service parameters offered; and can better enforce their rights if they are not respected. It becomes easier to change their provider. They can control their consumption and are protected against bill shocks. For the future: Better informed consumers that can more easily enforce their rights. Satisfied consumers are more likely to increase their consumption. Netter service quality thanks to more switching and competition Vice President Neelie Kroes said: “These measures will empower consumers to claim what they pay for. It will help you leave your provider you are aren’t getting what you pay for, or simply want a different type of service. You would have the same rights no matter where you are in Europe and who your provider is.” "The new provisions on transparency and switching will substantially reinforce consumer rights and encourage competition between providers. These EU-wide requirements are necessary to make European single consumer place work.”